Clear Plc v The Director of Border Revenue

Factual and Procedural Background

The Appellant, a Public Limited Company trading as an import/export business from 545 Hyde Road, Belle Vue, Manchester, imported 40.8kg of Platinum Sponge through two co-directors of a Swiss-based company called Mydas. On 1 July 2009, the two individuals were stopped at Manchester Airport after entering the green "nothing to declare" channel, carrying the goods in hand luggage. The goods were seized as liable to forfeiture. The individuals pleaded guilty to offences of failing to declare goods under Section 78(3) of the Customs and Excise Management Act 1979.

The Appellant sought restoration of the seized goods, which was refused by the Respondents. A review upheld the refusal based initially on the view that Mydas owned the goods. The Appellant subsequently produced an agreement dated 31 March 2009 confirming ownership by the Appellant, prompting a re-review. The re-review decision dated 15 January 2010 upheld the original refusal to restore the goods, concluding there was an attempt to smuggle the goods into the UK without paying tax.

The Appellant appealed this re-review decision to the First-tier Tribunal. The Tribunal also considered preliminary applications concerning the admissibility of certain evidence.

Legal Issues Presented

1. Whether the refusal to restore the seized goods was reasonable and proportionate in the circumstances.
2. Whether the Reviewing Officer was entitled, on re-review under Section 14(5) of the Finance Act 1994, to consider matters beyond the specific issue of ownership raised by the Appellant.
3. Whether the Reviewing Officer's decision was lawful, including whether any irrelevant matters were taken into account or relevant matters ignored, and whether there was any error of law.

Arguments of the Parties

Appellant's Arguments

• The re-review should have been limited to the issue of ownership only, as per Section 14(5) of the Finance Act 1994.
• The offences pleaded by the individuals did not involve dishonesty, therefore the basis for refusal (smuggling) was misconceived.
• The Appellant produced evidence of prior importations conducted similarly and declared on VAT returns.
• The Reviewing Officer should have conducted further inquiries upon receiving a memo concerning the Appellant's VAT compliance history.
• The refusal to restore was disproportionate given the high value of the goods.
• The Reviewing Officer failed to consider exceptional circumstances and only focused on prejudicial factors.

Respondent's Arguments

• The general policy of not restoring properly seized goods is reasonable and proportionate.
• The Reviewing Officer appropriately considered all relevant factors including proportionality, reasonableness, and exceptional circumstances.
• The Reviewing Officer was entitled to consider the credibility of the Appellant's evidence, including lack of insurance, failure to consider health and safety, and previous importation history.
• The question of loss to the Revenue was irrelevant to the restoration decision.
• The Reviewing Officer reasonably concluded, on the balance of probabilities, that the Appellant's actions were reckless or dishonest.

Table of Precedents Cited

Court's Reasoning and Analysis

The Tribunal carefully examined the statutory framework under Section 14(5) of the Finance Act 1994, concluding that while the Appellant could request a re-review based on new facts (ownership documentation), the Reviewing Officer was entitled to consider all relevant matters relating to the Appellant's claim, not solely the ownership issue. This interpretation avoids ignoring relevant considerations on re-review.

The Tribunal found the Respondents' general policy of not restoring properly seized goods unless exceptional circumstances exist to be reasonable. The Reviewing Officer, Mr Harris, was found credible and had taken into account both mitigating and aggravating factors, including the unusual method of transportation, lack of insurance, and the history of importations.

The Tribunal accepted that the Reviewing Officer’s conclusion of an attempt to smuggle goods was based on the balance of probabilities and did not rely on findings of dishonesty, consistent with the differing standards of proof in civil and criminal contexts. The criminal proceedings and their outcomes were considered separate and not binding on the restoration decision.

The Tribunal found that the Reviewing Officer's use of information about the Appellant’s VAT compliance history was reasonable to assess credibility. Evidence admitted late or excluded was found not to have affected the reasonableness of the decision.

The Tribunal rejected the Appellant’s claims of naivety and found the method of transport reckless and lacking commercial rationale. Conflicting evidence about the role and necessity of Mydas in the importation was noted, with the Tribunal concluding it was an unnecessary intermediary.

The Tribunal determined that the Reviewing Officer had taken all reasonable steps to gather information and was not obliged to delay his decision pending the conclusion of criminal proceedings. The decision was found to be proportionate, reasonable, and in accordance with policy and law.

Holding and Implications

The appeal is DISMISSED.

The Tribunal upheld the decision of the Respondents not to restore the seized goods. This means the goods remain forfeited and the Appellant’s request for restoration is refused. The Tribunal did not identify any exceptional circumstances warranting restoration. No new legal precedent was established; the decision confirms the application of existing policy and statutory interpretation in restoration cases involving seized goods.